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Venture Slips On An Oil Slick!

Whoa, what’s with the Venture dropping 32 points or 4% in just 2 days, leading to an unusual March on top of a freaky February?

Spring has sprung in most of Canada, but it certainly hasn’t been a pretty couple of days for the Venture which closed below 800 yesterday for the first time since early December.

Before we get into one reason WHY this is happening, let’s take a look at the Venture short-term chart for a look at the current behavior of the Index from a technical perspective.

There’s reason to believe that some immediate/near-term relief is on the way as RSI(2) and RSI(14) on the daily chart have hit low extremes not seen since the 2017 bottom in July when the Index landed at 748.84.

Nearest support is 780 which the Venture came within just 2 points of yesterday before finishing at 784.

For weeks we’ve been pointing out key resistance in the low 830’s.  A market will take the path of least resistance, so after not being able to push through the 830’s the Index decided to test important support instead.

The EMA(8) and EMA(20) are the critical short-term moving averages – they are at 811 and 822, respectively, and in decline.  Both EMAs need to be conquered and both must reverse to the upside for confirmation of the start of a fresh uptrend.

Canadian Resource Sector Hindered By A Negative Political Backdrop

One significant factor that’s impacting Canadian markets, especially resource stocks, is political in nature:   It’s not a partisan comment to say that incompetent left-leaning governments at the provincial and federal levels (Trudeau, Wynne, Notley, Horgan-Weaver) have implemented policies and taken positions that are hurting the resource sector, in particular the Oil and gas industry, and the general economy as a whole.  Canada is now trailing the United States, for example, in almost every economic category and the gap is widening (but we’ll “save the planet”, right?).

One recent bank report indicated the Canadian economy is losing $50 million a day ($16 billion a year) due to a lack of pipeline capacity.  Politicians possessed by gender and “climate change” ideologies (imagine, putting a resource project to a “gender” test!) are destroying investment and jobs right across the country while also putting Canada at a competitive disadvantage vs. our largest trading partner.

Justin Trudeau has brought in a National Energy Program that’s just as bad as the one his father introduced more than 3 decades ago, while an ill-conceived federal revamping of the resource project approval process has added new regulatory hurdles for companies.  In B.C., the Green Monster is doing everything it can to block the critical Kinder Morgan pipeline expansion while one half of the two-headed Green Monster (Andrew “Wacky” Weaver) has actually come out against the largest proposed investment ($40 billion) for an industrial project in the province’s history – an LNG facility in the northwest part of the province that would generate 10,000 jobs.  What sane politician would oppose such a project?  Wacky Weaver’s reason is that it would produce 8 to 10 megatonnes of greenhouse gas emissions and the NDP has no “climate plan” to address that.  He’s prepared to defeat the NDP on the issue later this year if it doesn’t produce a satisfactory “climate plan” (hopefully he will and B.C. can rid itself of this cancerous Green-NDP coalition).

Now the Good News – change is in the air as an election in Ontario in just over 2 months (June 7) is expected to finally put the horrendous Kathleen Wynne government out of its misery and usher in a new period of fiscal sanity and pro-business, pro-resource sector policies.  That change, led by populist conservative Doug Ford, should dramatically alter the national discourse and encourage investors in the process.

Individual Stock Updates

Garibaldi Resources Corp. (GGI, TSX-V)

If there’s one company exploring in Canada with an opportunity to breathe new life into the entire junior resource market with the discovery of a generation, it’s Garibaldi Resources (GGI, TSX-V) which will soon be taking aim at a bull’s eye massive sulphide target within the HC-1 conductor on a significant step-out from EL-17–14 – a world class 40.4-m intersection.

It’s not just the impressive geophysical signatures that are pointing to massive sulphides in ALL directions from the Discovery zone that was confirmed through drilling late last year, but Dr. Peter Lightfoot has collected an overwhelming amount of geological evidence that supports the case for a robust Nickel-Copper-rich system and a new mine in the heart of a prolific high-grade Gold and Copper-Gold porphyry Camp.

One of our favorite clips from Jon’s recent interview with Dr. Lightfoot is the one below when Jon quizzed him about the immediate area to the NORTH and why it wasn’t drilled last year (if this isn’t the definition of “blue sky”, what is?):

The HC-2 conductor, meanwhile, is a pleasant surprise and could lead to exciting new possibilities southwest of last year’s drilling.  Based on news late last year, we already know that at least 2 km of prospective ground exists to the east-southeast of the Discovery zone while a northeast trend of geophysical anomalies and surface mineralization continues for a minimum of 6 km.

Hang on to every GGI you’ve got because we expect crews will be mobilizing in April for a dramatic restart to drilling that could quickly carry the stock back to last year’s highs.

Pascal Biosciences Inc. (PAS, TSX-V)

A non-resource stock that’s ideally positioned to zoom to the upside is Pascal Biosciences (PAS, TSX-V) which we’ve been recommending as an astute buy anywhere in the 40’s.

With Pascal at current levels (it closed unchanged yesterday at 42 cents), investors have tremendous leverage and limited downside based on the following:

1. The story is highly compelling – Pascal is the first company to identify a mechanism in which cannabinoids may provide a direct benefit in immunotherapy
2. The $5.2 million financing at 40 cents is a game-changer for the company in terms of advancing its business plan and driving news flow
3. The full warrant at 60 cents is good for just 12 months and could easily pad the company’s coffers by an additional $8 million
4. The 40-cent financing provides additional price support within an already exceptional band of technical support between 44 cents and 35 cents
5. Technical set-up is very bullish (primary uptrend) including reversals to the upside in the 200, 300, 500 and 1,000-day EMA’s
6. Given the above, potential downside from current levels (closed at 47 cents Friday) is extremely limited
7. Blue sky upside
8. Liquidity and interest in the stock is outstanding
9. Current market cap is only $21 million (only 50 million shares outstanding following the $5.2 million raise)
10. Very capable management team

PAS 6-Year Monthly Chart

You’ll see few charts on the Venture that are as encouraging as this one.

PAS broke out forcefully above a downsloping channel last month on record volume with 35 cents being the critical breakout point, coinciding with new Fib. support and the current EMA(50).

Our analysis is that this stock is going to enjoy an explosive 2018 with next measured Fib. resistance in the $1.20’s – accumulate and hold!

Canada Cobalt Works Inc. (CCW, TSX-V)

No company – we repeat, no company – in the northern Ontario Cobalt Camp is better positioned to produce a Cobalt resource and get product to market than Canada Cobalt (CCW, TSX-V) given its underground access at the Castle mine.  President and CEO Frank Basa just needs to hurry up the process to commence underground drilling – Jon just had a meeting with him and we’re confident he’ll execute on that plan.

Last year, CCW ran from pennies to a high of 30 cents before losing half its value and briefly trading in the mid-teens where it was an incredible buy.  It then more than tripled in just over 2 months to a January high of 55 cents before starting another correction, similar in percentage terms to the one last year.

Note the following in John’s fresh CCW chart:

• RSI(2) is at a low extreme, barely above zero
• Price is at the bottom of a downlsoping channel
• Strong support zone in the high 20’s

From a fundamental standpoint, CCW remains well below where it should be in relation to its peers.  Basa does have to move his feet a little faster – that’s what the market is saying and we believe he understands that message.

iMetal Resources Inc. (IMR, TSX-V) 

There will come a point when Gold will suddenly explode to $1,400+ and discovery plays like iMetal Resources (IMR, TSX-V) will rise by orders of magnitude.

The election of Doug Ford, a strong proponent of northern Ontario’s resource sector, is also expected to positively impact companies in that region.

And here’s something else – iMetal Resources has the full support of both First Nations groups in its area (the Gowganda West Project).

The above, combined with an exciting grassroots discovery of high-grade Gold over a broad area of outcrop on a property contiguous to a 4-million ounce Gold deposit, gives us great encouragement that IMR can turn into a multi-bagger win for investors in 2018.

Technically, IMR has dropped on low volume toward tremendous new support at the top of the bullish ascending triangle that formed over a 2-year period.

GT Gold Corp. (GTT, TSX-V)

GT Gold (GTT, TSX-V) bucked the trend and was up sharply yesterday, closing with a 7-point gain at 64 cents.  Subscribers should be accumulating on any weakness with an eye toward holding for the next 4 to 6 months for a minimum move to measured Fib. resistance in the $1.20’s.

Just over a week ago the company announced the closing of a $6.5 million private placement above the market at 72 cents per share (no warrants).  That’s certainly a vote of confidence in the company’s Tatogga Property in northwest B.C. where an exciting high-grade Gold discovery was made early last summer, propelling the stock to a high of $2.76 where we advised locking in profits.

The company’s cash position is now $9.5 million, meaning this summer’s planned program is now fully funded.

Technically, it’s safe to assume the stock bottomed out in the mid-40’s last month.  Accumulate on any weakness.  Next major resistance is 89 cents followed by $1.20’s.

It’s worth reviewing our piece on GT Gold during PDAC…

Why Are These People Smiling – Their Stock Has Tanked 80%! 

Below is a picture of the GT Gold (GTT, TSX-V) crew at the PDAC “Core Shack” this afternoon.

Charlie Greig, one of our favorite geologists, is the second from the right in this picture, holding some highly mineralized drill core in each hand from the company’s Tatogga Property (Saddle South Discovery) in northwest B.C. near Iskut.

After surging as high as $2.76 last summer (BMR gave a sell recommendation at Fib. resistance at $2.65 after our original buy alert below 40 cents during the first half of the year), GT Gold has fallen 80% to just 55 cents (today’s close).

Ouch…but these folks are all smiles!

Charlie’s no market wizard (virtually no geologists are) but he does understand how to find Gold, and he has found lots of it at Saddle South – a high-grade epithermal Gold-Silver vein system that was never drilled until last year.  GT Gold completed 28 RC holes last summer and 58 diamond drill holes for 16,000 m.  Abundant juicy intercepts along 1,000 m of east-west strike to >500 m down-dip from surface were highlighted by 51.5 g/t Au over 6.95 m in hole #7.

Meanwhile, a potential Red Chris-style porphyry system has been drilled into at Saddle North.

GT Gold is fully financed for this year’s work (about 85 million shares outstanding after the 84-cent flow-through PP closes) and Charlie told Jon this afternoon that the company expects to drill as much as 30,000 m in 2018, starting in June.

So this is why Charlie & Co. are smiling – they know they’re onto something big and they’re confident about where things are headed once the drills start turning again.

We bring GT Gold to your attention tonight, not because you should buy it tomorrow morning but you should put it on your “watch list” as a strong candidate for at least a double or even a triple from the spring lows to this summer’s high.

Note:  John, Jon and Dan hold share positions in GGI and CCW.  John and Jon hold share positions in IMR.  Jon also holds share positions in GTT and PAS.